Most homeowners lack sufficient insurance coverage to fully rebuild their homes after a total loss. Using contract-level data from Colorado, we document substantial variation in underinsurance across insurers, with more reputable and experienced insurers tending to write complete coverage. This cross-insurer variation is not explained by differences in policyholder characteristics or sorting. Among households that lost homes in a major wildfire, those insured by low-coverage firms were less likely to rebuild and more likely to sell. From a discrete choice model of insurance demand, we find that homeowners tend to shop on premiums without adjusting for differences in coverage limits across insurers, a phenomenon we call coverage neglect. Coverage neglect reduces consumer surplus by 10% of annual premiums.
